LONDON, Aug 8 (Reuters) - Italian government bonds rallied across the curve on Wednesday after Prime Minister Giuseppe Conte said the government would not make “foolish” demands while negotiating with the European Commission over its 2019 budget.

Conte told a news conference that Italy would negotiate with the commission on a “courageous” budget programme but would not be “unreasonable and foolish in our demands”.

Yields slipped 5-7 basis points across the curve after the comments which came soon after economy minister Giovanni Tria pledged reforms in the upcoming budget.

The yield on the country’s benchmark 10-year government bond was lower 5 bps at 2.82 percent, its lowest in nearly a week, while the closely-watched spread over Germany was at 242 bps. (Reporting by Abhinav Ramnarayan; editing by Sujata Rao)